On Tuesday, German Foreign Minister Annalena Baerbock said that the nation is in the middle of a “hybrid war” as the Russian war with Ukraine worsens Europe’s energy concerns.
At this year’s NATO summit in Madrid, Baerbock told CNBC that Germany was creating contingency strategies in case the Kremlin cuts off its gas supplies.
Primarily relying on Russian gas to keep houses heated and power its export economy, Germany is preparing for a potential suspension in Russian supplies if the Kremlin decides to use its energy as a financial weapon against Western nations while it battles Ukraine.
Economists and corporate leaders are racing to figure out how Europe’s largest economy will fare in the coming months. Germany is best known for its cars and its machine tools, used in factories throughout China. Still, the country’s chemical and glass sectors are most likely to be the hardest hit, Reuters reports.
Baerbock said such circumstances could also cause the nation to make tough choices regarding who has to suffer from power cuts.
“We are faced now in Germany with the question now that if there’s no gas coming through Nord Stream 1 … we have to decide which institution may be cut off the grid,” she said.
With flows down nearly 40%, Germany progressed to the second of three stages of its supply emergency program, The Dallas Express reported. The Kremlin blamed the sanctions.
Germany imported 59.2 billion cubic meters of Russian gas in 2021. The country had plans to double supplies with a second gas pipeline, Nord Stream 2, but Germany stopped those plans before the war began on February 24.
A complete cessation of Russian natural gas exports could cause the German economy’s performance to decline by 12.7% in the second half of 2022 for an economic loss of 193 billion euros ($203 billion), according to the Bavarian Industry Association.